Energy costs may not be the highest cost in the overall operation of facilities for SMEs & SMIs but with the more competitive and demanding market due to changes in consumer trends locally and globally, every cent counts especially for those who produce price sensitive products or services.
Financial barriers often being highlighted as one of the biggest obstacles in pursuing energy efficiency in the form of implementing energy saving initiatives at most energy using sector. In most cases, the bigger the investment, the more significant savings can be achieved that will make everyone involved in the process satisfied with their involvement in the initiatives that give benefits to the organization.
However, getting the approval to make the big investment is often not an easy task and process too and can resulted in ignoring initiatives that will smaller results, less costly and sometime no costs involved at all but much more practical, achievable in shorter period and also sustainable.
This zero or less costly initiative is a part of the bigger term called energy management and in easier definition, actions that we can take within our existing tasks in to day operations related to energy consumption that will help us to reduce energy consumption without affecting the output of the operation.
There are many successful stories where various energy using facilities did or investing in big projects involving retrofits or application of newest energy efficient technologies with big money involved too. At the same time, we can also achieve greater energy efficiency in energy performances with small budget and certainty through small improvements in daily operations.
What can be done?
Here, I would like to share some tips from my personal experiences and some reading at online materials as energy efficiency industry practitioner for more than 15 years about implementing energy saving initiatives where no or minimal costs are involved which are the need to:
i) Understand the energy efficiency facts of all or at least energy using equipment or system.
The energy consumption of different types of equipment can vary if we compare the actual performances against the manufacturer’s specifications or other independent energy performance ratings or standards. By knowing some basic specification related to the efficiency of our equipment, it will give us some ideas on what equipment require some proper monitoring and controls of its operation and why we should consider energy efficiency features for future replacement of the equipment although the initial costs is generally higher compare to standard products.
ii) Measure energy consumption for energy using equipment/areas with permanent sub-meters.
The measurements of energy data has been proven effective in leading to produce energy cost reduction provided it is properly planned and implemented. We need to know how much electricity we use at our facilities and how much energy being used for each energy using system or equipment such as air conditioning and/or heating systems, compressed air system and lighting. The accurate information on specific energy consumption by each major equipment will help us to focus on energy saving initiatives and any improvement on energy to these biggest users will be most likely to give more significant results in energy cost savings. With budget constraint, the installation of sub-meters is recommended to be carried out reasonable time frame and gradually covered identified areas or equipment in stages.
iii) Monitor the actual energy consumption trends based on real-time data gathering from sub-meters.
The gathering and analyzing of energy consumption trends and status of based real time data will enable us to make immediate decisions to prevent possible more energy waste. This often occurred when recorded data to be checked only when waste identified after the data collected and analysed by the end of the month or week or when the equipment have operational problems. When we can monitor our equipment to see if it is performing optimally, we will be able can do a much better job of providing preventive maintenance and may also predict a pending failure.
iv) Benchmark energy use across the operations and to understand the effects of energy market trends.
The energy consumption data gathered from all major equipment will be useful for benchmarking purposes for equipment with similar characteristics that will make us better prepared to evaluate the likely effects of new equipment or processes.
We also need to be well aware of national trends in energy supply and demand. If we have been notified that the cost of electricity is likely to increase soon, it may be an important consideration as we plan what types of improvement or new technologies to be used to minimize energy wastage that will keep the cost of production to be affected at a very minimal.
v) Understand the effects of operation and maintenance activities to energy cost for equipment.
The operation and maintenance of major energy using equipment has a huge effect on energy consumption and the rising energy consumption for every of equipment may indicate the need for maintenance. Therefore, it is important to link the data on real-time energy consumption to the maintenance records which the data will help us to see correlations that may provide opportunities to reduce energy and maintenance costs.
vi) Use historical energy consumption data to plan and reduce future energy needs.
If the historical energy consumption data on monthly or yearly basis and analyzed, we can identify anomalies that may present opportunities for further efficiency. The data on past energy use can be used to identify anomalies in current consumption, which may present opportunities for improvement.
Challenges in the current scenario
In the wake of current energy market trends in Malaysia where the rationalization of energy subsidies has started and will continue gradually in the way forward, any price increase will definitely will hit all SMEs and SMIs in different ways financially. Petrol and diesel subsidies reduction already started recently and subsidies to gas and coal to be revised and expected to be followed by electricity tariff increase by early next year.
The increase of energy price for fuel for transportation and operations such as petrol, diesel and gas and the soon to be increased electricity tariff is something that everyone has to deal with but the way everyone has to deal with also need different type of support mechanisms.
Unlike multinational or big companies which has the resources and capacity internally or appoint external parties, SMEs and SMIs do need the assistance in technical and advisory for them to identify and implement energy saving initiatives and then to sustain their energy efficient operations in a long term.
With SMEs & SMIs represent about 99.2% of total business establishments in Malaysia that provide employment for about 56% of the total workforce based on 2010 report, they have been and will always be the important source of growth for the nation in. They will play a major role in Malaysia’s new economic model to transform Malaysia from a middle-income economy to a high-income economy.
What is needed?
There have been several financial assistance available for SMEs and SMIs that can be utilized with regard to improve energy performance for their facilities in the use of more energy efficient technologies and also for human capacity buildings such as the RM200 million for Tabung Kumpulan Usaha Niaga (TEKUN), RM1.5 billion in soft loans for companies employing green technology and RM3.5 billion for basic infrastructure and amenities as well as training programs and socio economic programs to spur growth of economic corridors. However, the extent of utilization of these funds in relation to energy efficiency that will reduce their energy cost is unknown.
However, more is needed in term of the accountability of which entity will be responsible to assist and facilitate facilities operated by SMEs and SMIs technically to reduce energy costs through energy performance improvement. SMEs and SMEs require ongoing supports and guidance especially at the early stage of energy management which is to identify the potential energy saving measures, then to kick-off the implementation and later to monitor and improve their energy performance.
At present condition, the industrial energy users and energy efficiency industry players have been given run a round by the government with no clear or dedicated agency entrusted to perform the much needed assistance and guidance. What is so puzzling now, under the same ministry, there are several agencies carrying out various energy efficiency initiative namely Energy Commission, Malaysia Green Technology Corporation and SEDA Malaysia.
To make thing more confusing to the market, energy users and industry players are also often referred to other agencies or entities with regard to some procedures or processes related to energy efficiency project implementation at government or private facilities. To certain extent, some of these agencies and entities are competing with industry players to capture some shares for the same services in market despite their roles that are suppose to create and assist the industry to grow. This has created uneven playing field between them and industry players where some of these agencies and entities are funded through grants or other financial assistance under the government budget.
The results of all these fragmented approaches with almost no one centre that can be called one stop , energy users have to spend so much time and efforts just to seek answers to their queries or assistance to their applications which is clearly will be counter productive to their businesses where every minute is a cost to them.
When all these will stop?
I guess only the responsible ministry for energy could answer that and to do what are necessary to meet the plight of these SMIs and SMIs especially. Where energy costs appear likely to continue rising and energy use so central to the health of many businesses, rising energy costs will definitely pose more significant risks to SME and SMIs.
We can mitigate some of these risks by planning now to increase our energy efficiency in the coming years but we need every party to play their roles because the efficient management of energy is a system and system will subsequently fail if some of key components are not functioning. In energy efficiency, government is one of the key components in the system which is now in a malfunction mode.
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